Legislature(1993 - 1994)

03/15/1994 01:00 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HB 497 - OFFICERS OF UTILTIY COOPERATIVES                                    
                                                                               
  Number 020                                                                   
                                                                               
  REPRESENTATIVE JOE GREEN, SPONSOR OF SSHB 497, testified                     
  saying, "This is actually a very simple bill.  It just                       
  addresses a problem of one of the cooperatives in the state.                 
  It happens to be the one that serves my district.  The                       
  problem is:  As restricted by current statute, the presiding                 
  officer of a utility board of directors must assume the                      
  title president.  Usually the president assumes the                          
  responsibility of day-to-day operations while a chairman or                  
  a chairwomen presides over the board."                                       
                                                                               
  (Representatives Davies, Bunde and Williams joined the                       
  committee at 1:04 p.m.)                                                      
                                                                               
  REPRESENTATIVE GREEN continued, "I have sponsored this bill                  
  at the request of the electrical cooperative that serves my                  
  district.  At that utility, the day-to-day manager is called                 
  the general manager.  The problem is there that the banks                    
  and other institutions with whom this person must deal pay                   
  little attention or respect to someone with the title of                     
  general manager.  A simple solution to this, especially in                   
  regards to dealing with banks and refinancing institutions                   
  is that the bill would allow, but not require, utilities to                  
  call the presiding officer a chairman, which is the common                   
  title for such a position in today's business world.  This                   
  would allow the day-to-day manager to be called a president.                 
  When the president of the utility calls for an appointment,                  
  it is my belief that he or she will be better received than                  
  a general manager.  This then would serve the utility well                   
  and the 65,000 cooperative members would benefit."                           
                                                                               
  Number 063                                                                   
                                                                               
  REPRESENTATIVE CYNTHIA TOOHEY asked, "What is the cost of                    
  putting this bill in?"                                                       
                                                                               
  REPRESENTATIVE GREEN said, "In actual dollars, very                          
  little..."                                                                   
                                                                               
  REPRESENTATIVE TOOHEY asked, "Is it really that important to                 
  do this?"                                                                    
                                                                               
  REPRESENTATIVE GREEN replied, "It is in this particular                      
  cooperative's case because, as I mentioned, as a general                     
  manager he sometimes has difficulty getting appointments                     
  that he wouldn't have difficulty getting if he were called                   
  president."                                                                  
                                                                               
  Number 075                                                                   
                                                                               
  DAVID HUTCHENS, EXECUTIVE DIRECTOR, ALASKA RURAL ELECTRIC                    
  COOPERATIVES ASSOCIATION, testified in support of SSHB 497                   
  saying, "We probably never would have raised the issue,                      
  except for the fact that the financing resources available                   
  to electric and telephone cooperatives is rapidly changing.                  
  Chugach Electric, the largest co-op of the state, no longer                  
  borrows from REA (Rural Electrification Administration) and                  
  so they have to go out into the regular commercial banking                   
  market to get their financing.  And when they go to Wall                     
  Street for a bond issue, as they have done once and                          
  anticipate doing again before too long, they found that...                   
  it was a handicap for them that they were using, as required                 
  by state statute, titles that are inconsistent with normal                   
  business practices, by others coming before the Wall Street                  
  folks for bond issues.  So this would simply make it                         
  permissive with the electric co-ops and telephone co-ops to                  
  change their bylaws if they choose to do so to use the                       
  titles chairman and vice-chairman for their board officers                   
  to free up the title president for the person who is now                     
  known as their general manager.  It's a very small item but                  
  would be of significance to the cooperative utilities as                     
  they lose their REA financing.  Right now, the only one I                    
  think this appeals to is Chugach Electric Association,                       
  perhaps Matanuska Telephone Association.  There will be                      
  others as time goes along."                                                  
                                                                               
  Number 130                                                                   
                                                                               
  REPRESENTATIVE TOOHEY asked, "What prevents your Board of                    
  Directors from naming you president?"                                        
                                                                               
  MR. HUTCHENS said, "The state law says that the president                    
  has to be the chief presiding officer of the board."                         
                                                                               
  CHAIRMAN OLBERG said, "Most commonly, chairman of the board                  
  and president are two distinct terms.  And president is                      
  typically chief operating officer."                                          
                                                                               
  REPRESENTATIVE GREEN said, "The board takes a very active                    
  part.  It's not as if it were the board of General Motors or                 
  the board of most corporations.  The board meets weekly and                  
  takes up a significant number of matters that wouldn't be                    
  common to other types of organizations and because of that,                  
  these two people are in a lot of activities that maybe                       
  wouldn't otherwise be the case, so this would certainly ease                 
  that concern."                                                               
                                                                               
  Number 160                                                                   
                                                                               
  DAN BLOOMER, EXECUTIVE STAFF ASSISTANT, CHUGACH ELECTRIC                     
  ASSOCIATION, testified via teleconference in support of SSHB
  497 saying, "Chugach strongly supports the passage of this                   
  bill which will allow the electric and telephone                             
  cooperatives to use the title of chairman and vice-chairman                  
  for the top board officers.  ...current statute requires                     
  that the titles of president and vice president be used for                  
  these officers.  In the previous years, Chugach and the                      
  other electric cooperatives throughout the state and around                  
  the nation have relied solely on the Rural Electrification                   
  Administration, the REA, to provide capital for the                          
  construction for the construction of plant and other                         
  facilities.  In recent years, the REA has decreased the                      
  amount of loan funds available to cooperatives, increased                    
  the interest rates for its loans and has forced many of the                  
  cooperatives to take alternative financing.                                  
                                                                               
  "In 1991, Chugach took advantage of federal legislation                      
  which allowed it to prepay its REA debt prior to the                         
  maturity of the loan without penalty.  Chugach refinanced                    
  its REA debt through a public bond offering and became the                   
  first electric cooperative in the nation to sell bonds in                    
  the public market to replace REA debt.  During the bond sale                 
  preparation, Chugach's organizational structure was reviewed                 
  and scrutinized by a number of financiers and bond rating                    
  agencies.  Those organizations were confused with the board                  
  officers titles of president and vice president, which are                   
  different from what they experience in their dealings with                   
  privately owned corporations.  The proposed HB 497 offers                    
  electric and telephone cooperatives the option of changing                   
  these titles if they so desire but does not require them to                  
  do so."                                                                      
                                                                               
  CHAIRMAN OLBERG said, "Representative Toohey, I think your                   
  point is well-taken and if it weren't already in statute I                   
  think one could wonder why it's in statute, but since it is                  
  and it acts as an impediment to an organization that has                     
  guts enough to go out on the bond market and get away from                   
  REA, I think it's a valid piece of legislation."                             
                                                                               
  REPRESENTATIVE DAVIES said, "I would offer a conceptual                      
  amendment which would just add the word `chairwomen' and                     
  `vice-chairwomen' everywhere that it would be appropriate,                   
  in front of chairmen and vice-chairmen."                                     
                                                                               
  CHAIRMAN OLBERG objected to the amendment and said, "I                       
  simply think that chairmen and vice-chairmen are generic                     
  terms in everyday business."                                                 
                                                                               
  REPRESENTATIVE TOOHEY objected to Chairman Olberg's comment.                 
                                                                               
  REPRESENTATIVE DAVIES said, "I think that's the problem that                 
  we, in our language, tend to do that and I think that we                     
  need to make every effort to recognize that we don't erect                   
  glass ceilings and things like that.  By our language,                       
  sometimes we imply that somehow if you're a man, you're                      
  better than if you're a woman.  And I think that this would                  
  recognize explicitly that we don't do that.  We call our                     
  speaker `madame speaker' to reflect that.  We don't call her                 
  Mr. Speaker or something like that or some term that implies                 
  a certain gender.  So I think that either we have a gender                   
  neutral term or we reflect the appropriate gender.  Again                    
  it's an option, they can do whatever they want.  It's no                     
  mandate.  It's just an option."                                              
                                                                               
  Number 260                                                                   
                                                                               
  CHAIRMAN OLBERG said, "The question before us is then:                       
  shall the words chairwoman and vice-chairwoman be added in                   
  all the appropriate places?"                                                 
                                                                               
  A role call vote was taken.  Representatives Willis, Toohey,                 
  Davies and Bunde voted to adopt the amendment.                               
  Representatives Williams, Sanders and Olberg voted no.  The                  
  motion to amend SSHB 497 passed.                                             
                                                                               
  REPRESENTATIVE WILLIAMS moved that the amended version of                    
  SSHB 497 be moved out of committee.  There were no                           
  objections.                                                                  

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